Joining a Startup? Here’s What You Need to Know

The thought of joining a startup can be enticing. For some, it’s the autonomy and freedom to experiment with new ideas that lures them in. For others, it’s the more collaborative, casual work environment and opportunity to work alongside like-minded peers who are passionate about entrepreneurship.

What You Need to Know Before Joining a Startup

1. Early Employees Create the Culture

When you join an established organization, the culture is more immediately apparent. Values have been defined and refined over the years and, if executed successfully, permeate the company, informing how employees interact, solve problems, and collaborate.

At a startup, the early employees are the culture. The founders’ personalities and values tend to influence daily operations. With every new hire and decision made, the culture slowly starts to form, and whenever a founder chooses to pursue or ignore an initiative, they’re sending a signal to employees about what they think will help the organization achieve its mission.

Before deciding to join a startup, make sure you align with the founders’ values and vision. If you don’t, it’s likely the culture won’t be a fit. Given some startup employees are also expected to work 50 to 60 hours per week, you want to know the work you’re doing is meaningful and engaging.

2. Your Financial Future Is Uncertain

If your paycheck came late, would you be prepared? The reality is, depending on the startup’s stage, you might not get paid on a regular schedule.

Are the founders bootstrapping and using their own money to get the company off the ground? Is there a plan to fundraise? If so, how much capital do the founders need and who are the investors they’re working with? You should have the answers to these questions before accepting a position, so that you can better gauge the risk.

If you have savings in place, the opportunity might be worth it. It’s important, though, to determine what you can and can’t live without, as your financial future is more uncertain.

3. The Benefits May Vary

Salary is only one of the benefits to consider. You might be offered equity, or a stake in the company, to augment your pay. If you are, carefully read the terms and conditions. It’s important to know the total number of shares outstanding—not just what you’re being offered—so that you can get a true picture of how much of the company you’d own.

Equity is granted in different forms, including stock options, in which you buy shares at a predetermined price, and restricted stock units, which are typically subject to a vesting schedule. That schedule determines when you’re eligible to earn equity and typically requires you to stay at the company for a certain number of years.

If you’re working for a startup you’re confident will sky-rocket, then equity can be an enticing perk. If the startup’s exit strategy isn’t defined or the future of your industry is unclear, negotiate instead for health insurance—another benefit some startups might forego until they’re profitable.

It’s important to know your non-negotiables before joining a startup. Is there a certain salary threshold you need to hit, or can any gaps be offset by equity? The benefits vary by startup, so understanding your priorities will help you determine whether you’re making the right next step.

4. Adaptability Is Key

If you prefer process and structure, a startup environment might not be for you. Startups have limited resources, which means employees typically need to tackle work outside the scope of their job description.

For those who thrive in ambiguity and can easily adapt to change, this is a plus. Joining a startup offers you the opportunity to gain new skills and explore different functional areas you might otherwise not have exposure to working at a larger firm.

It’s important to acknowledge the risk and do your research. Look into the founders’ backgrounds. Is this their first startup? Do they have the strategic vision needed to take the company to the next level? From there, analyze the industry. Are there opportunities to disrupt the status quo, and is your startup positioned to make a significant impact?

While joining a startup might be a risk, it’s a chance that could pay off. You never know: You could end up working for the next Airbnb or Netflix.

About the Author

Lauren Landry is the associate director of marketing and communications for Harvard Business School Online. Prior to joining HBS Online, she worked at Northeastern University and BostInno, where she wrote nearly 3,500 articles covering early-stage tech and education—including the very launch of HBS Online. When she's not at HBS Online, you might find her teaching a course on digital media at Emerson College, chugging coffee, or telling anyone who's willing to listen terribly corny jokes.